Long Post for Investors (redflix S2E08)
I close my eyes and I can see
a very different picture waiting for me
As of Dec. 10th, Sound Concepts had 510K users and this is a relatively new part of their business in the last year or so, that has really taken off. I've posted before how MRR is recognized and the delay with that. So what is Sound concepts MRR?
510,000 x $10 = $5.1M MRR?
That is over $50M/yr and now really taking off. This is not revenue the combined companies will see down the road. This is real revenue for both of them and this is just one part of the company!
If you go back and re-listen to the 12/21 update, there are some interesting things Rory said.
1.) They have 75 of the top network marketing companies in the world
2.) They have been joint selling
3.) They already closed sales together
4.) Existing users will be able to upgrade
5.) A lot of other companies are looking to sign on
6.) If you sign a company you are getting 10,000 users or more
7.) "Nobody today recognizes that value, but soon you will"
8.) "How the financial community is likely to value that business and add it to our value. Look, draw you own conclusions on the price of the stock."
Top MLM companies have millions of users. How many of these companies will continue to grow their user base with the app?
How many new deals has the combined teams closed last month?
How many of the 500K user will upgrade?
What is the cost of upgrading? $5?
If you sign a company with 10,000 users, do the math. These are million dollar deals the company is doing. Million dollar deals!
Talk about an accretive acquisition.
Rory can't comment on the value of the company. He has encouraged people to do their own DD and draw their own conclusion.
Notice he said "financial community" instead of "investor community". The financial community will know how to value a company.
As an example, here a company that I posted about before that I know very well since I use their product everyday.
Smartsheet beats estimates with $46.9M in revenue, up 59%, in 3rd earnings report as public company
They raised $150M in their IPO and their revenue was $47M last quarter. They filed for $100M to begin with. They are losing money but have a market cap of $3B. Yeah, that's right, billion and their loses are growing.
Their pricing starts at $14/mo. They only really have one product, plus some plugins for an additional cost and one higher priced management tool that likely a lot of people don't buy.
What is their average deal size? I can tell you for sure, it's not $1M. They do a bunch of small deals since they are selling to single users. A good enterprise deal for them might be $20K/yr. I would guess.
Here's the kicker. Are you sitting down?
They have 650K paid users. And how many users will nFusz/SC have in Q1? Maybe that.
Back to nFusz. Next month they may already have 25% of the that revenue, but unlike the example above, nFusz has a lot of products, many of which could even be a separate company.
It's not hard to use your imagination and figure out how nFusz could be generating $200M/yr this year. If so, would $3B be a fair valuation for a company with so many verticals?
My example company market cap is 15x revenue and they are not in the CRM space that has a higher PE.
Let's pretend nFusz only does $50M in revenue this year. Lets use that same revenue to market cap ratio of 15. That would put nFusz at $750M market cap.
What is the market cap today? About $100M. That would be a $3.50 stock tomorrow and that would be based on no revenues from any other vertical and the direct sales vertical sputtering.
Let's go back to $200M revenues. When nFusz achieved this, that is at least a $17 stock. If nFusz does a 1:20, make that a $340 dollar stock.
Hows that for a psychological effect?
Please do your own DD, do your own math and do not get it off a message board. There are very few on the message board that know how to value tech companies.
I close my eyes and I can see
a very different picture waiting for me
As of Dec. 10th, Sound Concepts had 510K users and this is a relatively new part of their business in the last year or so, that has really taken off. I've posted before how MRR is recognized and the delay with that. So what is Sound concepts MRR?
510,000 x $10 = $5.1M MRR?
That is over $50M/yr and now really taking off. This is not revenue the combined companies will see down the road. This is real revenue for both of them and this is just one part of the company!
If you go back and re-listen to the 12/21 update, there are some interesting things Rory said.
1.) They have 75 of the top network marketing companies in the world
2.) They have been joint selling
3.) They already closed sales together
4.) Existing users will be able to upgrade
5.) A lot of other companies are looking to sign on
6.) If you sign a company you are getting 10,000 users or more
7.) "Nobody today recognizes that value, but soon you will"
8.) "How the financial community is likely to value that business and add it to our value. Look, draw you own conclusions on the price of the stock."
Top MLM companies have millions of users. How many of these companies will continue to grow their user base with the app?
How many new deals has the combined teams closed last month?
How many of the 500K user will upgrade?
What is the cost of upgrading? $5?
If you sign a company with 10,000 users, do the math. These are million dollar deals the company is doing. Million dollar deals!
Talk about an accretive acquisition.
Rory can't comment on the value of the company. He has encouraged people to do their own DD and draw their own conclusion.
Notice he said "financial community" instead of "investor community". The financial community will know how to value a company.
As an example, here a company that I posted about before that I know very well since I use their product everyday.
Smartsheet beats estimates with $46.9M in revenue, up 59%, in 3rd earnings report as public company
They raised $150M in their IPO and their revenue was $47M last quarter. They filed for $100M to begin with. They are losing money but have a market cap of $3B. Yeah, that's right, billion and their loses are growing.
Their pricing starts at $14/mo. They only really have one product, plus some plugins for an additional cost and one higher priced management tool that likely a lot of people don't buy.
What is their average deal size? I can tell you for sure, it's not $1M. They do a bunch of small deals since they are selling to single users. A good enterprise deal for them might be $20K/yr. I would guess.
Here's the kicker. Are you sitting down?
They have 650K paid users. And how many users will nFusz/SC have in Q1? Maybe that.
Back to nFusz. Next month they may already have 25% of the that revenue, but unlike the example above, nFusz has a lot of products, many of which could even be a separate company.
It's not hard to use your imagination and figure out how nFusz could be generating $200M/yr this year. If so, would $3B be a fair valuation for a company with so many verticals?
My example company market cap is 15x revenue and they are not in the CRM space that has a higher PE.
Let's pretend nFusz only does $50M in revenue this year. Lets use that same revenue to market cap ratio of 15. That would put nFusz at $750M market cap.
What is the market cap today? About $100M. That would be a $3.50 stock tomorrow and that would be based on no revenues from any other vertical and the direct sales vertical sputtering.
Let's go back to $200M revenues. When nFusz achieved this, that is at least a $17 stock. If nFusz does a 1:20, make that a $340 dollar stock.
Hows that for a psychological effect?
Please do your own DD, do your own math and do not get it off a message board. There are very few on the message board that know how to value tech companies.
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